- SWFX traders are 54% bearish
- 51% of pending orders in 700-pip range are set to BUY the gold
- Pair heads towards weekly S1 at 1,266.60
- Upcoming Events: US ISM Manufacturing PMI, FOMC Member Kaplan Speaks
Due to fundamental reasons the pair made a sharp turn around and began falling to the south, crossing the 61.8% Fibonacci retracement level near 1,278.95. From technical perspective, this moment matched with the upper boundary of a recently formed descending channel. Accordingly, the pair is likely to continue to move to the south, trying firstly to hit the weekly S1 at 1,266.60.
The Commerce Department said that the US economic growth in the second quarter was the quickest in more than two years, with a 3.1% annual increase in the reported period. However, growth momentum is expected to be slowed owing to the impact of Hurricanes Irma and Harvey. Analysts suggested anticipated weakness would be softened by rising inventory investment in the Q3.
PMI release in America
At 14:00 GMT the Institute for Supply Management will publish an update on the Purchasing Managers' Index, which is expected to plunge from 58.8 to 57.9. This is the only event on Monday that is likely to cause some volatility in the markets apart from what have happened already.
XAU/USD breaks 61.8% Fibonacci retracement level
Due to release of another set of the US inflation and consumer spending data, which did not change the overall prospect about the upcoming interest rate hike, the buck managed to drag the bullion through the 61.8% Fibonacci retracement level at 1,278.96, thus confirming an existence of a new descending channel. Although this breakthrough happened a little bit earlier than expected, but it still perfectly fit into the general picture, in which the rate was expected to gradually move to the bottom, trying to reach the lower edge of a dominant ascending channel. Nevertheless, during this trading session the pair is likely to make a temporary rebound near the 1,273.14 level, which represents location of the 100-day SMA. If such scenario materializes, the junior channel might transform into a falling wedge.
Hourly Chart
If on hourly chart the Friday's fall was not expected to happen so early, then on daily timeframe such advance perfectly fit into the general picture. Namely, the rate expectedly broke through the 61.8% Fibonacci retracement level at 1,278.95 and now is about to test the 100-day SMA near 1,273.12. Although a short term rebound is possible, eventually the buck is expected to drag the gold through this barrier as well.Daily Chart
Markets sentiment remains bearish
Traders of Dukascopy remain neutrally bearish on the price of gold, as 54% of open positions are short. In the meantime, 54% of pending commands are to sell the commodity.
OANDA Gold traders are bullish, as 62% (+4%) of open positions are long, compared to previous trading session. In the meantime, SAXO bank traders are similarly bullish, as 64% (-3%) of open positions are also long.